Tracker Mortgage

Tracker

A Tracker mortgage is a variable rate mortgage where the interest rate always follows the Bank of Englandís Base Rate.

Tracker Mortgages

Get a Free Quote Introduction To Tracker Mortgages
Tracker mortgages address the fundamental core of a mortgage, namely the interest rate on the loan paid to the lender. A Tracker mortgage tracks, or is tied to the Bank of England base rate. The margin is an agreed percentage above or below the current base Ė usually above. So for instance if the Tracker is set at 1% above the Bank of England base rate and that base rate falls from 6% to 5% then perhaps within a month your Tracker rate will fall from 7% to 6%. Not all lenders immediately pass on changes to the Bank of England rate to their customers on a Variable Rate so taking a Tracker mortgage is one way of ensuring that you shadow the base rate not the lenderís rate.

The Tracker mortgage allows you to be in tune with the prevailing economic climate of the UK so if the base rate falls you will see a benefit. Equally if the base rate climbs you are not protected against increased costs.
The Tracker mortgage is usually offered for a set amount of time perhaps 2-5 years after which the mortgage will revert to the standard variable rate. However, there are Lifetime Tracker mortgages which Track the Bank of England rate for the whole lifetime of the mortgage.

Tracker mortgages tend to be very popular and are often aimed at first time buyers with attractive initial offers. All high street lenders will offer Tracker mortgages which means that they are plentiful and usually competitive.

Although Tracker mortgages donít offer the absolute certainty of level of future repayments that Fixed Rate mortgages do for instance they do offer the added comfort of knowing that if the base rate plunges you are not tied to the previously higher rate. However, it should be noted that as in all mortgages the small print should be examined. Some lenders will specify that there is a get out clause for them if the base rate drops too far which negates the chance of saving too much.

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2.89%

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2.89%

Discounted Rate

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Buy To Let

2.99%

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3%

 

 

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